The Key Components Of A Personal Financial Plan

Personal Financial Plan

Benefits of Personal Financial Plan:

• It assists your current financial picture, cash flows, income taxes and investments.

• Optimizes cash flows to achieve maximum potential.

• It matches with your financial goals.

• It brings financial empowerment and intelligence.

• Brings clear and sensible roadmap to financial independence.

• Let you measure and track investment performance and goal attainment.

• Improves communication around the money with spouse or partner.

Key components of successful financial Plan:

• Assessment: It compiles simplified version of personal financial statements like B/S and I/S which may include personal assets like car and house etc.

• Goal Setting: it includes all short and long term goals set by an individual for future like saving and fund for

• Execution: Formally execute the plan with required discipline and perseverance.

• Monitoring and Reassessment: With the passage of time, financial plan is monitored for possible reassessments of adjustment with due course of time.

Definitions of General and Specific Goals:

Specific Goals:

Are realistic, have specific dollar amount, Specific time frame, indicate the type of action to be taken to achieve it, and are measurable.

Specific goals are those objectives that we need necessarily to obtain or set. Making a specific goal is a constructive and productive way of goal setting.

Specific goals are always SMART, clear cut, concrete, detailed, distinctive, explicit, significant and special. Like if an individual wants to expand his/her business in another country.

These goals are often found in written form and having proper documentation which are commonly found in businesses like a business specific goal can be to start a new setup, hire employees, improve quality and expand production with lower cost. Such goals could be short term but often long term.

General